Demand Response and Advanced Metering

Abstract

Demand response - changing prices to reduce consumption at peak demand - creates value when it encourages electricity consumers to reduce load at peak times by either curtailing energy-using activities or shifting them to off-peak times. Load that is reduced during times when the power system has encountered critical conditions (in the form of higher prices on wholesale markets or stress from supply insufficiency) will carry greater value than load that is reduced during normal times.

Keywords: demand response, energy policy act, metering, DR programs, critical-peak pricing, real-time pricing, energy, energy consumption, energy policy,

JEL Classification: Q4, Q40, Q41, Q43, Q48, Q49